The hospital board last week rejected the latest low bid of $36.9 million, which was from Kiewit Construction of Anchorage, and charged city officials with reducing the construction project's scope.

Meanwhile, the board is unsure whether it will retain the architectural design firm, NBBJ of Seattle, Bartlett Administrator Bob Valliant said in an interview. The city has a $3 million contract with NBBJ that runs one year beyond the date the project is completed.

Some officials have criticized NBBJ because it estimated the cost of the addition at $20.2 million and Kiewit's bid came in at $27.6 million for that part of the project.

The city originally estimated construction of the whole project at $30 million, but in January 2003 only one bid came in, and that was at $41 million. The hospital solicited bids again and in December 2003 received four bids, of which Kiewit's was the lowest.

The four bids reflect the true cost because they were only $1.5 million apart between the highest and lowest bids, city architect Rod Wilson has said.

The project calls for erecting a three-story addition to the hospital building, remodeling the west half of the existing hospital and remodeling the east half.

Local contractors want Bartlett to divide the three-year project into three phases that would be bid separately and provide local jobs.

Valliant said the board hasn't decided whether it will do that. Contractors have failed to prove that breaking the project into three phases will be less expensive, he said.

The city cannot lock in construction prices three years out and expect contractors to absorb the difference if costs escalate over time, said Wayne Coogan, owner of Coogan Construction in Juneau.

Since the hospital has insisted on bidding the project as one job, contractors have had to provide high estimates on the costs of labor, insurance, and bonding for two and three years from now, he said.

Coogan submitted the second lowest bid after Kiewit.

The project could be delayed if the board does not award a bid by mid-April, Wilson has said.